Thyroid-specific enhancer-binding protein (T/EBP) is a key DNA-binding protein which controls thyroid-specific expression of genes encoding thyroid peroxidase, thyroglobulin, and thyroid stimulating hormone (TSH) receptor. T/EBP also regulates expression of lung-specific genes such as those encoding surfactant proteins A, B, and C, and clara cell secretory protein. Developmental analysis of T/EBP mRNA during rat embryogenesis demonstrated that the expression of T/EBP appears at 10.5 days post-coitum (E10.5) in the thyroid rudiment, embryonic lung epithelium, and the floor of the diencephalon, suggesting that T/EBP may be involved in development and/or differentiation of these organs. In order to address this question, we produced a mouse line lacking T/EBP expression using homologous recombination in embryonic stem cells. The T/ebp-null mice were stillborn due to absence of the normal lung. The hypoplastic lung tissue present in these mice consists of a dilated sac-like structure without any indication of branching morphogenesis. The a-null mice also lack the thyroid. Severe abnormalities are further evident in most of the hypothalamic area of the forebrain and the pituitary is completely absent. Precise correlation was obtained between the area where T/EBP is expressed during early embryogenesis and organs or regions which are missing in later development. These results clearly demonstrated that T/EBP is essential for the organogenesis of the thyroid, lung, hypothalamic area of the forebrain, and pituitary. Studies are in progress to characterize processes in which arrest of the organogenesis took place, and to determine those genes controlled by T/EBP which encode proteins that are directly involved in organogenesis of the thyroid, lung and ventral forebrain.